1. Market review: Spot gold broke below the $1,850 mark in intraday trading on Wednesday. After the minutes of the Fed meeting were released, it rose in a short-term, narrowing the intraday decline, and finally closed down 0.67% at $1,853.41 per ounce; spot silver fell first and then rose. , and finally closed down 0.44% at $21.99 an ounce.
2. Minutes of the Fed meeting: raising interest rates to provide flexibility later this year, raising inflation expectations for this year. The minutes of the Fed’s meeting showed that most participants believed that 50 basis points of each rate hike could be appropriate at the next two meetings. A sharp rate hike would provide policy flexibility later this year. Fed researchers expect PCE to rise 4.3% in 2022, while lowering their forecast for next year to 2.5%.
3. CBO expects the Fed to only raise interest rates to 1.9% this year. The U.S. federal budget deficit will plummet to about $1 trillion this year as tax revenue surges and coronavirus relief programs expire, the U.S. Congressional Budget Office (CBO) said, while forecasting that by the end of 2022, the Fed will only reduce the benchmark The interest rate is raised to 1.9% (2.6% expected by the market), and to 2.6% by the end of 2023.
4. On Wednesday, the Fed swaps showed that the Fed will raise interest rates by about 98 basis points in the next two meetings, slightly lower than 100 basis points, indicating the uncertainty of the Fed raising interest rates by 50 basis points in each of the two meetings in June and July. sex increases.
5. Stock market volatility has increased dramatically, and low-volatility ETFs are not a safe haven. The two largest low-volatility ETFs, the $26.6 billion iShares MSCI U.S. Minimal Volatility Factor ETF and the $10.2 billion Invesco S&P 500 Low Volatility ETF, also jumped 30-day volatility to June 2020 highest level since.
6. Another ECB official retains the option to raise interest rates by 50 basis points in July. ECB Governing Councillor Nott said the rate hike would only happen in July, not in June, and a 50 basis point hike in July is not out of the question. ECB Governing Council member Rehn said the ECB will lower its economic forecast next month and should raise interest rates by 25 basis points in July and raise interest rates to zero in the fall.
7. The Reserve Bank of New Zealand raised interest rates by 50 basis points to 2% as scheduled, and pointed out that stabilizing inflation is a top priority, and the official cash rate is expected to be at least this year. rose to 3.25%.
1. The minutes of the meeting hint at an opportunity for risky assets to fight back in the second half of the year. Although most Fed officials agree that they will continue to raise interest rates by 50 basis points in the next few meetings, because continued aggressive action will give the Fed the flexibility to turn at any time according to actual needs, the tightening may continue at all. Not for a long time. If the PCE forecast released in the minutes of the meeting is accurate, it implies that the Fed will raise interest rates three more times by 50 basis points, which will end the current tightening cycle and pave the way for a big comeback in risk assets in the second half of this year.
2. The minutes of the May meeting provided little information. Most members thought two 50 basis point hikes would be appropriate, but that policy would be data dependent. The minutes did not discuss a larger 75 basis point rate hike, but neither did it discuss a slower rate hike. What happens after the Fed moves closer to neutral is an open question, with uncertainty over policy rising further in September.
3. Gold is poised to enter a consolidation state. Gold prices regained lost ground after the minutes of the Federal Reserve’s meeting indicated that a larger rate hike was not considered. Members raised their inflation forecasts, which could be seen as a hawkish stance, but risks to Treasuries and commodities are rising, which could influence the Fed to act more aggressively, the minutes showed. Given the current strength of the dollar, gold appears to be poised to enter a consolidation phase, but it is unlikely to be bearish at this time.
4. Gold prices are trading near key support. Gold prices at $1,850 this week may be more important than ever. The weekly chart shows that the uptrend line from August 2021 is just around $1,850. Gold prices dipped below that line at one point in the session on Wednesday, but then recovered some of those losses. It is currently a position that can be both long and short, and the $1850 mark will be used as a reference for stop loss. It can be expected that the high volatility of the market will continue. I personally think that unless gold breaks below the trendline, bulls should believe that gold will .. rise to $1900.
